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American Airlines Proposed Job Cuts Shocked Jim Cramer: Video

American Airlines has announced major job cuts down the pipeline. Here's what Jim Cramer is thinking.

American Airlines plans to cut its management and support staff by about 30% to slash costs as the coronavirus pandemic has severely curtailed air travel.

The airline must “plan for operating a smaller airline for the foreseeable future,” Executive Vice President of People and Global Engagement Elise Eberwein said in a letter to employees, Reuters reported.

American will offer voluntary options to its 100,000 employees before implementing involuntary reductions if there aren't enough takers.

Per Reuters, Once American reduces its management ranks, the airline will turn to frontline employees including flight attendants and pilots, who will receive fresh voluntary leave and early retirement options in June with the goal of avoiding involuntary furloughs.

All major U.S. airlines have said they will need to shrink in the fall, once U.S. government payroll aid that bans involuntary job cuts expires on Sept. 30.

Jim Cramer, when asked about the job cuts, expressed shock at 30% of jobs being cut.

"How are they going to run the company? I mean, was the company that fat?" He asked.

Watch the video above for more.

You can follow Jim Cramer and Katherine Ross on Twitter at @JimCramer and @byKatherineRoss. Read more from Katherine Ross here.

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